Kosovo: Lottery Arrests Highlight Growth in Fraud

The announcement by Kosovo's international police last week that they had made several arrests for lottery fraud highlights the West's failure to introduce laws against money laundering and other illegal financial activity across the region.

Many people in the impoverished UN administered territory were lured into buying lottery tickets from a raft of shady, private lottery firms after watching TV adverts that featured beneficiaries of dramatic windfalls.

"I am grateful to the 'Scratch and Win' lottery for changing my life. I have five kids and a burnt house. With this money I will built a new home and finally my family will have a home of their own," one lucky man told viewers.

The impoverished street trader claimed to have won 77,000 euro from a ticket sold by ALSIT, a lottery firm based in Albania.

However, UNMIK police took the shine off ALSIT's reputation last Monday when they revealed its company personnel in Kosovo withdrew winning cards before tickets went on sale to the public. "People were paying money for cards that could not win," UNMIK police said.

Arben Gjergji, the Albanian manager of the Kosovo branch of ALSIT and Nezir Hajdari, an ALSIT employee, were arrested with two accomplices on suspicion of withdrawing the winning cards.

On March 21, UNMIK police also detained Nexhmedin Sejdiovski from Skopje, Macedonia, claiming he received 7,000 euro from ALSIT to appear on a TV advert and falsely claim he had won 128,000 euro in another of the company's scratch card game, The Cards of Luck.

The arrests followed what was clearly a lengthy investigation. They followed the adoption of a law two weeks ago that granted police extra powers to undertake covert operations in criminal investigations.

Derek Chappel, UNMIK police spokesman, said his officers had proof the arrested men violated Kosovo's criminal code. The police did not assert the entire company deliberately engaged in fraud, he said.

Engjell Burimi, ALSIT's Albanian boss, said it was not company policy to pay people to appear on TV and say they were prize-winners. The firm sold 7 million scratch cards last year, priced at 50 euro-cents each, and planned sales this year of 15 million, he said.

However, the recent arrests are bound to raise questions about the sincerity of other alleged prize-winners who appeared on ALSIT adverts. Several recent stars of company adverts claimed to have won prizes of 10,000 to 77,000 euro.

Intriguingly, they all came from a similar background, and were either jobless, poverty-stricken street traders, or homeless. ALSIT lottery cards apparently gave them all the means to rebuild torched homes and start new lives in the ruins of Kosovo's post-war economy.

Bashkim Sllamniku, director of the Lottery of Kosovo urged a return of the old state monopoly. He said only the Lottery of Kosovo abided by the province's former law on lotteries, adopted in 1989, before Serbia scrapped the region's autonomy.

UNMIK has announced a new tough approach to organised crime this year. At the same time, it continues to tolerate the growth of illegal business empires beyond its control. It may be difficult now to undo this financial confusion, which is partly the result of UNMIK's muddled approach to illegal or unlicensed business activity.

Arben Qirezi is a regular IWPR contributor.